U.S. Warns Chile on World Bank Loan

Assistant Secretary of State Elliott Abrams told a House international development subcommittee yesterday that he would oppose new international loans to Chile if a vote were held today.

He said he would recommend that the United States cast a "no" vote on multilateral bank loans to Chile to protest persistent human rights abuses and failure to move toward democracy under the leadership of Gen. Augusto Pinochet.

But he warned that the United States should not commit itself at this point to opposing such loans to Chile, saying that would destroy the incentive for change.

The next international aid package to Chile on which the United States will vote is a $250 million structural adjustment loan, expected to be considered by the World Bank in October.

There are "few carrots and few sticks available" to encourage change in Chile, said Abrams, assistant secretary of state for inter-American affairs. "An announcement now would leave Chile no incentive to improve."

Abrams said "no decisions have yet been made" either way, adding that an administration verdict would be based on "what happens in Chile between now and then."

The Chilean government must begin a peaceful transition to democracy, by legalizing political parties and holding elections, and must show "increased respect for human rights," by curbing arbitrary arrests, military intimidation and torture, Abrams said. The government must also allow a free press, he added.

Also testifying before the subcommittee of the House banking committee were Peter Hakim, staff director of Inter-American Dialogue, and Dr. John Constable, a burn specialist representing the Physicians for Human Rights, who examined the body of Rodrigo Rojas shortly after the District resident died from burn wounds in Santiago.

Dr. Constable testified that Rojas, whose mother attended the hearing, appeared to have been doused with a flammable liquid before he was set on fire, and said he was convinced after listening to witness testimony that the Chilean military had killed Rojas.

Hakim said the United States should oppose loans to Chile in line with Section 701 of the International Financial Institutions Act. The statute directs U.S. representatives to international financial institutions to oppose aid to countries whose governments engage in a "pattern of gross violations of internationally recognized human rights."

"A cut-and-dried case exists for applying Section 701 to Chile," Hakim said. "As long as it remains unenforced, having such legislation on the books conveys a weak, not a strong, U.S. commitment to human rights." U.S. law allows bilateral aid to Chile only for "human needs."

Hakim said the United States could send a strong message to Chile by announcing its opposition to international aid as well.